Some objective methods for determining relative importance of financial ratios

Abstract

The segregation of financial ratios into input and output ratios are useful to determine the business insolvency/failure and financial efficiency of the business organizations. A total of 18 software companies are considered with nine financial ratios. The aim of this study is to examine the efficiency of various financial ratios and identify their average weights through objective methods namely MLP of Artificial Neural Network, Entropy and Critic Methods.